Korean high speed rail authority to launch bond issues

Korean rail authority looks set to tap the domestic won bond market for fresh finance.

As part of efforts to meet funding requirements, the Korea High-speed Rail Construction Authority plans to issue W500 billion (US$453 million) in bonds by the end of this year. The Construction and Transportation Ministry said Friday it had received the rail authority's financing plan and will approve it after consultation with the Finance and Economy Ministry concerning the financial market's capacity to absorb such a large amount of bonds and subsequent rate changes.

The bonds will be issued on a monthly basis until the end of this year and follow W500 billion dispersed recently by the Finance and Economy Ministry from its public fund account.

A ministry source said the rail authority should not have any problems financing the bonds in the W100 trillion financial market because their value is a comparatively small amount.

The rail authority has already secured W318.1 billion from Indosuez Bank out of the W1.3 trillion it must provide from its own resources.

The rail authority plans to raise W1.3 trillion next year, too, either through the inducement of foreign funds or through the domestic financial market.

It has already secured $2.3 billion in foreign loans through the help of TGV of France.

(YONHAP)